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Denzil Minnan-Wong says the city could eliminate Bixi’s $3.9 million debt by allowing Astral to avoid building self-cleaning toilets.

Astral Media president Luke Sabatini and former mayor David Miller unveil the first of what was supposed to be a flock of high-tech public toilets back in May 2010, at the corner of Rees St. and Queens Quay. The toilets proved difficult to site and expensive to install, leading to Councillor Denzil Minnan-Wong's suggestion to drop the program and use the cash to buy Bixi instead.
(RICHARD LAUTENS / TORONTO STAR FILE PHOTO)

The popular Bixi bike-sharing program is close to breaking even on operations, but is struggling to pay off a loan that was guaranteed by the city, leading to calls for a city takeover of the company. (RICHARD LAUTENS / TORONTO STAR FILE PHOTO)

The chair of Toronto council’s public works committee has come up with a way to prevent the Bixi bike-sharing company from swirling down the drain: let another company build fewer toilets.

Councillor Denzil Minnan-Wong’s toilets-for-bikes brainwave was tentatively endorsed by the city’s transportation chief, Stephen Buckley, in a confidential report obtained by the Star. The proposal, Buckley says, could eliminate Bixi’s $3.9 million debt and put the company “on solid financial footing” for the government takeover he is recommending.

“A few months ago, it looked like Bixi was on the ropes. But I found a solution that will sustain an important city program that seems to be very popular,” said Minnan-Wong.

How do you pay off a bike company’s debt by allowing a non-bike company to avoid building toilets? Follow along here.

Bixi is close to breaking even on its day-to-day operations. But it cannot afford its debt payments, and the city is on the hook for the $3.9 million loan under a previous council guarantee.

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The city has an unrelated street furniture and advertising contract with Astral Media. Under that 2007 contract, Astral is supposed to build 20 self-cleaning public toilets. But the large, high-tech facilities are both difficult to place and expensive to build: they cost $450,000 each, Astral says. Only two have opened so far.

The 20-year Astral contract allows the city to “cash out” of the toilets after 10 years — that is, force Astral to pay the city a certain amount of money in exchange for the right to not build the majestic thrones. Minnan-Wong’s proposal: persuade the company to allow the city to cash out now, four years early, and funnel the proceeds to the Bixi debt.

“It’s an initiative that the details have to be worked out on. But there is a synergy and an interest on everybody’s part,” said Minnan-Wong, a North York conservative. “The public wants to save Bixi. The city wants to save Bixi. The city is not so interested in the toilets. And Astral is willing to help out.”

Astral would, of course, require a discount. “There’d need to be an incentive for Astral to write a cheque when it didn’t have to,” said Ron Hutchinson, its senior vice-president of real estate. But Hutchinson said the company is “happy to have a discussion about it.”

“If it gets adopted at executive committee, I guess somebody will sit down, and we’ll get the right people in the room who can figure out what it’s actually worth, and go from there,” Hutchinson said.

The proposal will be considered by Mayor Rob Ford’s executive on Wednesday. In the report, Buckley says Bixi’s loan could be paid off with “the funds from eight or nine washrooms.”

Ford himself has said that he thinks Bixi is “a failure” and “should be dissolved.” His spokesmen did not respond to a request for comment on Tuesday.

The toilets have few fans on council. Adam Vaughan, a downtown progressive who often opposes Minnan-Wong, said he agrees that it may make more sense to use Astral’s money for Bixi than for toilets.

The toilets’ size and configuration makes it “incredibly hard” to locate suitable sites for them, Vaughan said, and “it may have taken us years to find 20 locations.”

“They’re more awkward than we’d thought, and the demand isn’t that great,” said Scarborough progressive Glenn De Baeremaeker, an avid cyclist. He called the toilets-for-bikes plan “a great idea.”

Buckley says in the report that three private companies have expressed interest in owning or operating Bixi under certain “favourable” conditions. They include Oregon-based Alta Bike Share, the “largest, most experienced bike share operator in North America."

Alta, according to Buckley, says it could possibly “assume all or a portion” of Bixi’s debt — but only if it concluded that it could increase revenue by at least 15 per cent and reduce costs by at least 10 per cent.

City officials believe it would be wiser and less financially risky for the municipal government to take over the program itself. Transferring ownership to a company, Buckley writes, could cost “in the range of $2.8 million to $4.9 million” depending on the company’s proposal.

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